Correlation Between Armada Acquisition and Newbury Street

Can any of the company-specific risk be diversified away by investing in both Armada Acquisition and Newbury Street at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Armada Acquisition and Newbury Street into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Acquisition Corp and Newbury Street Acquisition, you can compare the effects of market volatilities on Armada Acquisition and Newbury Street and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Armada Acquisition with a short position of Newbury Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Acquisition and Newbury Street.

Diversification Opportunities for Armada Acquisition and Newbury Street

0.11

Correlation Coefficient

Armada Acquisition  Newbury Street

Average diversification

The 3 months correlation between Armada and Newbury is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Armada Acquisition Corp and Newbury Street Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newbury Street Acqui and Armada Acquisition is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Armada Acquisition Corp are associated (or correlated) with Newbury Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newbury Street Acqui has no effect on the direction of Armada Acquisition i.e., Armada Acquisition and Newbury Street go up and down completely randomly.

Pair Corralation between Armada Acquisition and Newbury Street

Assuming the 90 days horizon Armada Acquisition Corp is expected to under-perform the Newbury Street. But the stock apears to be less risky and, when comparing its historical volatility, Armada Acquisition Corp is 22.08 times less risky than Newbury Street. The stock trades about -0.07 of its potential returns per unit of risk. The Newbury Street Acquisition is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Newbury Street Acquisition on October 3, 2024 and sell it today you would earn a total of  5.50  from holding Newbury Street Acquisition or generate 157.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.65%
Values	Daily Returns

Armada Acquisition Corp  vs.  Newbury Street Acquisition

Armada Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Armada Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Newbury Street Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newbury Street Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Newbury Street is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Armada Acquisition and Newbury Street

The main advantage of trading using opposite Armada Acquisition and Newbury Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Acquisition position performs unexpectedly, Newbury Street can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Newbury Street will offset losses from the drop in Newbury Street's long position.

The idea behind Armada Acquisition Corp and Newbury Street Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.